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Pick n Pay results speech by chairman Gareth Ackerman – 12 May 2020

Good morning. These are extraordinary circumstances to be presenting our results. I am sorry that you are not with us in the traditional way. But you will understand why we are presenting the results this way.

We also apologise that our results are being published slighter later than usual.  This was due to having to meet additional JSE requirements in the wake of the Coronavirus pandemic.

We don’t know when the pandemic will end.  But we can be sure it will leave us profoundly changed.

We all know about the damage to people’s lives and the economy. 

But we have a responsibility to remain positive, and to look to positive change where possible.

I am incredibly proud of how our company has stepped up to the crisis. One of our core values, business efficiency, has never been more important.

The pressure has been immense.  From the earliest days of the crisis, we have had to accelerate all our work to stay safe, stay working, stay open and stay fully stocked.

Our core value of consumer sovereignty, putting customers first, has been at the forefront of everything we have done during this crisis, and will remain so.

We have stepped forward when it counted and done truly heroic work on the frontlines of a national emergency.

I’d like to thank the Pick n Pay and Boxer teams for their magnificent response. Our IT team has delivered faultlessly in responding to substantial additional demands, and our supply chain team has worked tirelessly to keep our stores full. The store teams have laboured under punishing pressure and deserve both praise and thanks.

The CGCSA has also done important work in representing the consumer goods industry, and we thank them for the role they are playing.

And lastly, thank you to our customers, who have trusted us to serve them safely, as we have for the last 50 years.

FOOD SECURITY

Our vital role in society is to keep the nation fed. Our Pick n Pay and Boxer stores play a major role as distributors of social grants, and are a critical and highly efficient network. We trust government adequately appreciates the role retailers play in ensuring food security.

True to our value of doing good, our Feed the Nation programme has done incredible work, alongside a large number of NGOs, to supply food supplies to some of the most vulnerable.  In doing this we have benefited from wonderful generosity from farmers, suppliers, and customers. We are also a distribution and delivery vehicle for the Solidarity Fund, and are also instituting a virtual voucher system.

This campaign has raised nearly R33 million from customers, partners and benefactors. This has helped us deliver over six million meals to date, an extraordinary result.

I have talked about the importance of food security for many years. 

It has taken this crisis for the debate to become mainstream. 

We are learning good lessons every day about what is produced at home and abroad, where the vulnerabilities are, and how they can be overcome in the short and long term. 
We must not forget these lessons when the crisis is over.  We must use them to plan for the future.
Reducing food waste is one simple and powerful way to increase food security.  I am sure the crisis has made many of us more conscious of waste, and more determined to use and reuse rather than throw away.  

I am encouraged by the progress we are making in our supply chain.  I am also grateful to our major suppliers who have joined us in the 10x20x30 Food Waste Initiative to achieve a 50% reduction in food waste by 2030.

EXCLUSIVE LEASES

It is important to focus not only on the immediate crisis, but on how we can play a positive role after the crisis. 

As the President has made clear, we must take every opportunity to nurture new businesses, and hasten the pace of transformation.  The Pick n Pay Foundation does brilliant work on this. 

We must now find ways to do even more. 

In its recent report, the Competition Commission expressed concern that exclusive lease agreements might discourage small and speciality retailers from opening in shopping centres.  This is not our experience.  We want to see thriving centres, where innovative and diverse businesses excite customers and raise the bar for everyone. 

To end any doubt, I am happy to announce today that Pick n Pay will not seek to enforce any exclusivity agreement against a small or speciality retailer in any centre in which we operate.  We have had an excellent dialogue with the Competition Commission, and will seek to finalise a commitment with them. 

I hope that, after the current crisis, government and the competition authorities give due priority to stimulating healthy competition.  This will enable us to create the jobs and transform the economy in the way will desperately be needed.

DIVIDEND

The coronavirus pandemic is a massive shock to the economy just when we thought we had hit bottom.

We must take the right decisions now to safeguard our future – individually, in our institutions and as a nation. 

This is why, after much deliberation, we have taken a difficult decision to defer our annual dividend.  In normal circumstances, on the back of these Results, the Group would recommend a final dividend in line with our dividend cover of 1.3 times headline earnings per share.

However, given the current economic upheaval, and the great uncertainty about events in the coming months, the Board has taken a prudent and responsible decision to preserve cash at this time.

We understand that many shareholders rely on their dividends to supplement their incomes.  Please be assured that we will review the situation just as soon as we have greater clarity later in the year.

Lerena will say more about this in a moment.

THE ROAD AHEAD

It is almost ten years since I became Chairman of Pick n Pay.

We have made enormous changes for the better.  We are a very different company today, and a much better one. 

By becoming stronger, we are better able to weather this storm. 

Our values have remained strong, and they mean that – even in the middle of the storm – we help our customers and communities first. 

The last year has been enormously challenging economic environment. And COVID-19 is a once-in-a-lifetime event, and a defining moment for our country.

I recognise the challenges facing the government at the moment.  It has the extremely difficult task of taking steps to limit spread of the virus, while trying to ensure that these actions do not destroy jobs and create greater hardship.  My plea is that, in charting the way forward, the government gives due consideration to the impact on the economy, on livelihoods, on companies that provide jobs, and on tax revenue which funds the work of government.

Within our business, our people have demonstrated true commitment and our execution has been phenomenal under extraordinary pressure.  We have learnt better than ever how to work as a team.

At the fore of our response to the crisis is our CEO, Richard Brasher.

He deserves enormous credit for his leadership, especially during this crisis. 

He has earned huge respect both internally and externally, and deservedly so.

Thank you Richard.


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